Payroll Tax Forms: What Is Form 941 And Why Must You File It?

When using a payroll software program, it is a good idea to have at least one employee who is familiar with your payroll processes, and your payroll software.

There is a major different in the location of your payroll data when comparing a payroll service to in-house software.

Payroll Service or Payroll Software - Three Questions to Ask Yourself When Deciding

There are several payroll-related tax forms that must be filed.

Form 941 is entitled Employer's QUARTERLY Federal Tax Return.

More specifically, the purpose of Form 941 is to report the following federal payroll information for each quarter: 1) Wages and other compensation paid to employees; 2) Federal income tax withholdings from your employee paychecks; 3) Social security tax and Medicare tax withheld from your employee paychecks; 4) Social security tax and Medicare tax that the employer must pay; 5) Federal payroll tax payments the employer has made for the quarter; and 6) Any remaining balance due of the quarterly payroll tax liability.

After adding up all the federal payroll taxes mentioned above, the employer tax payments are subtracted from the payroll tax liability to determine whether there's a refund or balance due.